over 30% fee? this is crazy!

[white_lie]

According to the new annual report, fiverr increased take rate to 31.8%, including freelancer's costs of promoted gigs and seller plus subscriptions.
I bet shareholders like that but as a user, both buyer and seller, I'm telling you, this is unsustainable. As much as I'd love for fiverr to be my main workspace, I can only afford it as a supplement to my freelance business. And I wasn't surprised by the 5% loss of active users that fiverr also reported. No other platform drains it's users so heavily.
Or am I missing something?

[emmaki]

Buyers pay 5.5% (plus $2.50 for small orders, I think $75)

Sellers pay 20% commission.

Fiverr's take rate is a combination of those and optional extras like Seller Plus and Promoted Gigs. Note the word "optional". 

The loss of active users is a deliberate part of Fiverr's new marketing strategy, which you should be clued into if you read the shareholder's letter. 

Do you know how much UW is draining its users? I'm guessing you're going to tell me it's just 10%. But what about the connects that you need to pay for in order to get a sniff of a job unless you're already well-established on the platform? Not really optional, and potentially a huge hidden cost for new sellers who can't spot fake job offers or write decent cover letters (and judging from the high amount of buyer complaints about floridly useless GPT cover letters, that's a lot of them). 

Here's a boring page from UW's Q3 2024 doc. Are you sure you want to be horrified about Fiverr's loss of 100,000 clients? 

This is despite Fiverr and UW apparently trying to swap places: Fiverr wants to go upmarket, UW wants to go downmarket (I imagine this was a key driver behind its decision to reduce commissions to 10%) to attract more sellers to make money money by selling more connects to get jobs from the same pool of buyers. And the buyers IIRC have to pay for listings. 

If you don't want to be drained and shook down by middlemen in the freelancing industry, carve out your own path with your own website. They're all doing it, just in different ways. I prefer Fiverr's business model. But then again, I was on Elance before they made the amazingly awful decision to merge with oDesk and call it UW at a time when Fiverr was the laughing stock, oDesk was the mediocre sweatshop, and Elance was the "premium" freelance marketplace (for the time). 

How times change... or not.

Just use both platforms and add the commission into your own price. There's no need to be outraged by anything. If you can't swallow the 20% into your costs, well, you probably need to rethink a thing or two. 

[white_lie]

1) it's optional as long as it's not a practical requirement to efficiently get a project. it drives the division between new and established freelancers. I get that being a Plus already, you don't care

2) criticizing uw is a weird way of defending fiverr, but ok.

3) your last sentence proves you haven't gotten the point. sellers do add commission to the price, that's obvious necessity. and that's what drives buyers away. and that's what will drive sellers away. see where it's going?
 

[visualstudios]

1 hour ago, emmaki said:

Buyers pay 5.5% (plus $2.50 for small orders, I think $75)

Sellers pay 20% commission.

That's the wrong way to look at it, Emma. The buyers are paying for the service. If they are ok with paying an extra 5% on top of that price, that means if I was dealing with them directly, outside of a platform, I could charge them 5% more, and keep that difference. Or give them a 5% discount and make the exact same.

If seller pays 20% and buyer pays 5%, in practice seller is making 25% less than they could. It's always the seller "paying" for it, in a way.

On a 10k order, 5% is $500 the buyer is paying to Fiverr directly. Seller is paying 2k. This is just too much - the bigger the orders get, the less attractive the marketplace becomes. I could just charge 10k outside, make 2k more, and the buyer would save $500 on top. Win-win.

Good luck getting big contracts here with that attitude. People with big budgets, and sellers selling for high prices will try as much as possible to do business elsewhere, lots of options that charge much less than 30% (or 25%) to handle transactions. That's fine when you're dealing with $5 and $10 orders. Once the values get big, the cut must get smaller.

There absolutely no good reason why the 20% fee shouldn't be more than enough to cover everything. Spend less, Fiverr, how about that?

Edited February 25 by visualstudios

[emmaki]

You don't need Seller Plus to succeed. Have you not read the many, many complaints about how rubbish many success managers are?

How useless the keyword analytics are because the data's so skimpy (and you can filch them off paying members through tags)?

How Promoted Gigs is a waste of money due to spam clicks having to be paid for?

How overpriced the program is for very little value? 

How inaccessible it is to new sellers before they prove themselves (pay attention, that's an important point). 

Fiverr also has gigs from every price point from $5 to $50,000. There's something in there for most sellers. More sellers are probably driven away by the dreadful quality of Fiverr's cheap, cheerful, and incompetent sellers who blame everyone but themselves for failure. That's what Fiverr's trying to fix (not very well, granted, but nevertheless, efforts are being made). 

As you are probably going to pretend you don't see, I got your lack of points very clearly: you appear to be wilfully ignoring it in favor of ad homs based around: 

• Le fiber defener lol
• u pay so u don't care lol
• comparing competitors lol 
• Fiverr is bad lol 

All in all, a classic response from someone who doesn't really have any good arguments to fire back. 

1 hour ago, white_lie said:

Or am I missing something?

Quite a lot, actually. Next time you want someone to tell you what you're missing, try not to be precious when someone comes to tell you exactly what you're missing. It's not a good look. 

1 minute ago, visualstudios said:

That's the wrong way to look at it, Emma. The buyers are paying for the service. If they are ok with paying an extra 5% on top of that price, that means if I was dealing with them directly, outside of a platform, I could charge them 5% more, and keep that difference.

If seller pays 20% and buyer pays 5%, in practice seller is making 25% less than they could.

Not sure I catch your drift? I'm saying that sellers need to integrate their commission into their pricing. So if you want $100 for a job, charge $125 etc. I'm not particularly concerned about the buyer's own fees. I was just quoting the basic fee structure as a sadly failed attempt to educate the gentleman (or gentlelady) who posted this fine post. 

- le ultim8 fiber defener (now available in white nite edition!)

[visualstudios]

2 minutes ago, emmaki said:

Not sure I catch your drift? I'm saying that sellers need to integrate their commission into their pricing. So if you want $100 for a job, charge $125 etc. I'm not particularly concerned about the buyer's own fees. I was just quoting the basic fee structure as a sadly failed attempt to educate the gentleman (or gentlelady) who posted this fine post. 

You're not thinking this through. 

The buyer is paying more than I get. That money should come to me.

If I want $1000, and charge $1050 to get $1000... buyer is paying $1050. If I was dealing directly, I would get an extra $50, at the same price. 

In other words, if I pay 20% and buyer pays 5%, I'm the one actually paying 25%. Buyer is paying x for my service, I'm making y, Fiverr is making the difference. That difference is 25%. That's what matters.

Otherwise, you could also say that the buyer is the one paying the 25%, and I'm paying 0%, since the buyer is the one who puts the money in.

In other words - seller commission and buyer fee are the same thing. Makes no difference what you call it. 

Edited February 25 by visualstudios

[visualstudios]

Let me take this to the extreme.

I want to make 100 with my work.

I price it at $125, due to 20% commission.

Fiverr charges a crazy 100% buyer fee, so buyer pays $250. (Doesn't matter what the number is, 5% or 100%, it's the principle that matters).

I made my $100. Did I pay a 20% commission? Nope. I paid over 60% commission, because there would be no "buyer fees" paid without me.

 

Am I happy with making $100? No, if somebody (Fiverr) made over $100 from the work. I want the $200 instead. That would be Fiverr making 20% out of my work on a $250 buyer purchase.

Edited February 25 by visualstudios

[emanuel_68]

16 minutes ago, visualstudios said:

That's the wrong way to look at it, Emma. The buyers are paying for the service. If they are ok with paying an extra 5% on top of that price, that means if I was dealing with them directly, outside of a platform, I could charge them 5% more, and keep that difference. Or give them a 5% discount and make the exact same.

If seller pays 20% and buyer pays 5%, in practice seller is making 25% less than they could. It's always the seller "paying" for it, in a way.

On a 10k order, 5% is $500 the buyer is paying to Fiverr directly. Seller is paying 2k. This is just too much - the bigger the orders get, the less attractive the marketplace becomes. I could just charge 10k outside, make 2k more, and the buyer would save $500 on top. Win-win.

Good luck getting big contracts here with that attitude.

There absolutely no good reason why the 20% fee shouldn't be more than enough to cover everything. Spend less, Fiverr, how about that?

try that with your own website! marketing fees, handling sales process etc.... the middleman does the most and that why u comfortable in charging what u charge on fiverr

[emmaki]

I prefer my nice simple interpretation of 20% from the seller and 5.5% for the buyer, where the seller prices in their commission in gig prices. 

No need for all this other stuff. It's no different from charging for overheads, considering taxes, and all the other stuff that eats into profits. Fiverr's take rate is also of little concern to me, since all of it after 20% is optional. 

I honestly don't know why so many sellers get their knickers in a twist about this (although granted, I do think that UW used to have a better approach to commissions, but then they went the 10% route)

 

 

[visualstudios]

Just now, emanuel_68 said:

try that with your own website! marketing fees, handling sales process etc.... the middleman does the most and that why u comfortable in charging what u charge on fiverr

I'm doing just that. 20% fee is ok for that. More than that? Not really. 

I'm comfortable charging more than I charge on Fiverr outside. It's not like this is a premium market anyway.

[visualstudios]

1 minute ago, emmaki said:

I prefer my nice simple interpretation of 20% from the seller and 5.5% for the buyer, where the seller prices in their commission in gig prices. 

No need for all this other stuff.

It's math. If I'm paying 105 for something and the person doing the work gets 80, they didn't pay 20%, they paid 25%. No way around it. You can agree with that cut, that's another story, but the numbers are what they are.

[visualstudios]

5 minutes ago, emmaki said:

since all of it after 20% is optional. 

Buyer fees are not optional, and as I explained, that's something the buyer is paying for your service. So, in practice, for what matters, all of it after 25,5% is optional. "Taking from the buyer / Taking from the seller" is semantics, they are the same exact thing.

As for promoted gigs, seller plus, early withdrawal, cash advance, etc, that I agree with, no issues with take rate there.

Edited February 25 by visualstudios

[emmaki]

Is it time for me to say what I always say when you or someone else starts throwing numbers at me? I suck at math!

3 minutes ago, visualstudios said:

Buyer fees are not optional, and as I explained, that's something the buyer is paying for your service.

Yes, you're right - should edit that, I meant after the basic (buyer & seller) fees to use the platform. 

Edited February 25 by emmaki
On going back I'm leaving it since I was talking from a seller POV only so w/e

[visualstudios]

I hope I made my point clear - Fiverr is taking a mandatory 25,5% of order values, not 20%. 

Now, the rest of the things, that are actually facultative, they can do whatever they want with that.

[emmaki]

Has anyone ever told you how pedantic you are sometimes? 

Now it's my turn to be a pedant: you forgot the small order fee.

Pedantry is fun! 

[visualstudios]

Just now, emmaki said:

 you forgot the small order fee.

I didn't forget, it just isn't relevant for me, so I don't think about it.

And caring about numbers is not pedantry. It's different to be selling a service to the end user where I make 25,5% less than what they paid versus making 20% less than what they paid. Maybe you don't care about that, but I do.

[emmaki]

2 minutes ago, visualstudios said:

Maybe you don't care about that, but I do.

Personally, I just think we approach pricing in different ways. I'm charging what I want to make plus 20%. I don't care about the seller fees, since they are not my pricing. That's Fiverr's fee that they take from the buyer at the point of ordering. Nothing to do with me.

 

 

[visualstudios]

8 minutes ago, emmaki said:

I'm charging what I want to make plus 20%. I don't care about the seller fees, since they are not my pricing. That's Fiverr's fee that they take from the buyer at the point of ordering. Nothing to do with me.

I've lost orders due to that difference. Buyer has, say, a 10k budget. I price for 10k. Buyer says "Fiverr is showing me 10,550, why? Can you eat the cost difference and make it 10k"? So yes, in that case I have to care about buyer fees.

It's a thing.

Besides, it makes a difference since I could be dealing with them directly, and pocket that extra 5% myself. It's just extra incentive to try to get direct deals and invest less on the platform. 

The buyer fees have to do with me, because they are fees they are paying to work with me. Without me (without sellers), there are no fees to be paid.

Also, that impacts value for money, funnily enough. I'm 5,5% more expensive (from the buyer's perspective) than what I price for. How big (or little) that effect is, depends on the buyer. It may be small, sure, but it's never zero.

Edited February 25 by visualstudios

[emmaki]

Well, I've never had that happen to me. In most cases for writers, $10k would be a long-term project with a set amount of articles to deliver over months (or years...).

For a copywriter, $10k is much easier to get on one sales page, especially for a high value product (like those $3,999 courses at the end of long, qualifying sales funnels). 

If you can show a buyer that you can write copy that shifts 10, 15 (etc) of their course, they're not going to quibble about 500 bucks. They're going to see the ROI.

OK, some will quibble. They're not the smart ones. 

So, I charge my 20% and I'm happy with that. I'm also happy to not work with anyone who doesn't want to pay my prices, though I am being a bit more generous with my offers at the moment since I need reviews (and I apparently like living dangerously). 

[visualstudios]

Just do the thought experiment I proposed above. Imagine the buyer fee was 10%. 50%. 100%. Wouldn't that make a difference? Would you still say "it makes no difference to me, since that's for the buyer to take care of at the purchase point?"

You can argue that 5% is inconsequential because it's a small number, but I don't see how any seller can argue that buyer fees should not be a consideration at all for sellers, in principle.

Edited February 25 by visualstudios

[emmaki]

There's no point in the thought experiment, though, other than to prove your point. Of course I would need to rethink my pricing strategies with any major changes to Fiverr's base fee structures.

But it's not likely to happen anytime soon. Fiverr's clearly gone down the "value added services" route for a higher take, just like UW decided that connects were the future. 

Everyone's going to have a slightly different approach based on what works for them and their personal situation. 

Have we exhausted this conversation yet? 

[hasembd]

I would love to fix my price as I need...

[navid_zafar]

The costs are not limited to:

1- Sellers pay a 20% commission.
2- Buyers pay 5.5% (plus $2.50).
3- Promoted Gigs include additional costs.
4- Seller Plus subscriptions.

For sellers outside the USA, additional considerations are:

5- Payment processing fees (Payoneer/PayPal etc.).
6- Exchange rate differences.
7- ATM withdrawals and local bank fees.

Overall, these expenses can amount to a significant cost for sellers.

[visualstudios]

3 and 4 are not mandatory.

5 is not a thing (in europe at least), paypal is free.

7 idem, also free.

 

6 is a PITA indeed.